Bridging the productivity gap

Over the past decades our society has nurtured expectations of an ever-improving quality of life following the misery that prevailed in Malta in the immediate post-war years. But our future quality of life will increasingly depend on a vibrant economy, a condition that, unfortunately at present, is far from being a reality.

The most daunting challenge facing the next government, which we trust will be a Labour one, will be the creation of jobs and the generation of income that will enable us to create wealth that allows us to improve our basic social infrastructure: education, health, the environment and other living conditions.

The successful handling of this challenge will be judged not only by our ability to create new employment but also in terms of the value we bring about through such employment. The one vital element that will determine our success will be the range of skills of our workers and our ability to make the best use of these skills.

While Maltese workers over the years proved to be as productive, if not more, than other workers in Mediterranean countries, this is no longer enough. We now face daunting competition, not just from low-cost countries like China and India but also from other EU countries, especially from eastern Europe. Our best chance of bridging the productivity gap, which has widened so much in the last several years, is by competing more on value and less on cost.

Of course, productivity improvements depend on a number of factors including capital investment, an efficient labour market and the upgrading of the skill levels of our workforce. A recent UK study established that increasing training by just five per cent could improve productivity by four per cent.

We must avoid the oft-repeated mistake of equating skills training to mere improvement of technical abilities. Proper skills improvement programmes will include:

¤ management training in leadership and innovation to exploit the use of technology;

¤ total commitment to customer service and ability to deliver goods and service on time and

¤ constant reviews of our workers' strengths to turn them to our competitive advantage.

To achieve this we need to be more granular in our analysis of where we are under-performing as a result of poor skill competences. We then need to focus on building the proper structures to address these issues in the different sectors of the Maltese economy. Generic skills improvement programmes based on a one-size-fits-all attitude will not get us far.

A future Labour government will put in place the proper structures to provide a thorough understanding of all the major business and public service skills needs and define optimum performance standards and support employers to achieve these standards.

We will then encourage the setting up of partnerships between public and private agencies to fund training programmes aimed at upgrading the skills level of our workers employed in the different economic sectors. In all this we will work closely with trade unions and with organisations representing employers because we believe they share the same ambition as us to have a workforce capable of ensuring top-notch productivity.

To deliver this ambitious remit we will need to use our limited resources well. The role of the government in building this network will be one of leadership to bring together the various interests to agree to the common goal. We will lead, provide support, offer views and advice, and leave it up to other partners better qualified to deliver the end product. We therefore expect our entrepreneurs not only to embrace this concept passively but to invest directly in the enhancement of the skills of their workers.

We will use every opportunity to attract EU funds aimed at these type of ventures. But we will also rely on our own ability to invest in our own capacity and ability to deliver high-quality training programmes because Labour believes in the rich potential of our workers to perform to the highest international standards.

Dr Mangion, MP, is deputy leader of the Labour Party for parliamentary affairs.